Commercial Property Blog
All posts from: December 2009
Taxing Times Ahead!
Fifteen-years-ago there was an obsession at the RICS that property was not seriously on the political agenda; that chartered surveyors did not have seats in boardrooms and, that as an investment class, property was getting too small a percentage of the pension fund pot.
Well these areas have all radically changed over the past decade and a half. Government awoke to the easy taxable gains that saw steep rises in stamp duty and ending empty rate relief. Surveyors are making it into the boardrooms and property is a strategic element in mergers and MBO’s. The proliferation of billboards for property funds and buy-to-let showed how property started to receive its share of pension funds.
One thing is for sure, though, you cannot retrace to early 1990s a bit nor have selective picking of the parts to keep and the parts to ditch.
As we enter the next decade under a strain of the national debt, weighing heavy on the UK so hard that we face the real prospect of being down graded by rating agencies, property could look like an easy plug to the fiscal waste pipe. We escaped the PBR round from Darling but, come the budget and following the election, who knows?
Of course Governmental lobbying is much more sophisticated and successful now for BPF and RICS but all the same the property is an easy target and the tax take has to come from somewhere!
Barrie’s blog: winners and losers of the 'noughties'
Here are my awards for property’s winners and losers in the `noughties’.
Having started at Property Week in 1999, after a seven year spell on construction magazines followed a 1988-1991 stint at Estates Times, it has been a fascinating decade to watch
I would love to hear your views, too, but here are mine:
Deals of the decade:
Derwent London merges with London Merchant Securities: a classic merger done at a reasonable price which sealed Derwent’s future until 2020
Way back in 2000: Hermes’ takeover of MEPC: at a time when property was hugely out of favour the fund manager led by Alastair Ross Goobey swooped for a £1.7bn bargain.
Agencies of the decade:
? CB Richard Ellis – for its explosive growth, albeit at a price
? Savills – which ruled investment from 2000-2005
? King Sturge – another huge growth story
? Franc Warwick and BH2 – for showing niche players can punch well above their weight
? in Scotland, Culverwell, which rounded off a feisty decade by advising Hammerson on its acquisition of Silverburn
? in Manchester, WHR, for showing niche firms can still take off
Agency flops of the decade:
? Two `one-stop-shop’ disasters, Chesterton and Erinaceous.
Property Companies of the decade:
? Peel – John Whittaker utterly rules the north-west
? William Pears Group – slowly and steadily it has grown huge
? Derwent London (see above)
Developers of the decade:
? Allied London: creating Spinningfields from scratch
? Canary Wharf Group: forget the corporate structure sitting above it: look at the impact on Londo
? Hammerson: the Bullring, Cabot Circus, Bishops Square: at one point it had £1.2bn of development on the go.
Developments of the decade:
Spinningfields, the Bullring and 30 St Mary Axe. Enough said.
Personalities of the decade:
Sadly I cannot give this gong to the head of a UK REIT.
Why didn’t any of them sell lock, stock and barrel at the top of the market?
Those entrepreneurs from smaller companies that did – Raymond Mould and Patrick Vaughan or Kevin McCabe, demonstrated the ultimate property skill of buying cheap and selling dear.
But my winner?
The Westfield chairman Frank Lowy – for creating and reinforcing the only true global property brand. Conquering the USA and UK in ten years is a hell of a feat.
And the big Losers:
Peter Cummings (HBOS) – no matter what he did to build Scottish property up, it doesn’t justify the fall; Neil Bellis and Lucy Cummings (Erinaceous) and anyone in property who helped bring Lehman to its knees.
See you in the New Year.
A 52,000 seat future for the Olympic stadium
I have thought of a long-term use for the Olympics Stadium – and how to help save West Ham.
For months ministers and the Olympic Park Legacy Company has been agonising over how to prevent the 80,000-seat 2012 stadium turning into a white elephant after the games. 80,000 seats is too big for a football club, and 2012 mastermind Seb Coe is keen to take the top tier of seats out post-games to reduce the stadium’s capacity to 25,000.
But why not go for a compromise and turn the stadium into a 52,000 seat ground suitable for West Ham? How? It’s simple: remove the top tiers of both ends of the Olympic Stadium, leaving the 25,000 seat lower bowl to run all the way around. You would leave the top tier of the two sides of the ground, giving a 52,000 capacity overall.
This is eminently suitable for a club the size of West Ham, who regularly sell out the 34,000-plus Upton Park but who would rattle around in an 80,000 behemoth.
Hotels, conference facilities, residential and even offices could then be built behind the lower tier at each end, bringing in extra income.
While West Ham have little money now they could raise cash by selling their Upton Park ground, and that money could be used to pay rent on a 50-year lease for the Olympic stadium.
This could be run for the public good, with an athletics track still intact for Coe’s cherished sport.
Sports Fans, Hammers fans, what do you think?
2009 - not the year of the Tiger
As we lurch head long towards the fast falling closing curtain of 2009 it is a time to reflect and look towards the dawning of 2010. It has been a strange year of surprising scandals – Tiger Woods; shocking revelations – Tiger Woods; and surprising retirements – Tiger Woods!
But in the wonderful world of property we have extraordinary conflict – the Candy’s versus everyone; we have mismatched battles Carlex versus Vincent Tchenguiz; and reclassifying credit ratings – UK versus Fitch!
In all it could have been a lot worse but I just feel we are not through the worst. There will surely be a further correction in 2010, there cannot be the price levels sustained as nothing has really fundamentally changed. We welcome the New Year and let’s hope it brings good cheer but watch out for the bear traps and elephants in the room!
See what Chainbow is doing at www.chainbow.com/facebook
"The greatest joy in nature is the absence of man"
Stricken Polar bears star on X-Factor; Sting is multi-tasking saving rainforests and launching a new album; and our planet gets simultaneously hotter/cooler/neither depending on the scientist/interest group/newspaper/TV show/blogger.
What of Copenhagen? The BBC blithely reports that Copenhagen is about "demonstrations, disruption, deadlock". Ban Ki Moon pronounces with a stunning grasp of occasion that "the time for consensus has arrived". And Arnie (reported as "tanned and coiffured") set out staggeringly low expectations for officials at Copenhagen.
But fear not. Having single-handedly eradicated "boom and bust" and saved the global banking system, our Gordon has flown to Copenhagen to save the planet. I just hope he's retained the flak jacket and helmet worn on his Afghan visit - he may have greater need of them in Denmark if protestors have their way.
Last week I hosted my first trustee meeting as CEO of the Sustainable Environment Foundation (SEF) www.s-e-foundation.com . The highlight was Sir Terry Farrell’s presentation of his Vision for Thames Gateway’s regeneration. I come back to this later.
Since the industrial revolution, humankind has rewritten the relationship between our race and our planet. Tube users may have seen this billboard quote; "The greatest joy in nature is the absence of man" by Bliss Carman. His observation has even more truth today.
For example, China wishes to urbanize 400m of its people by 2050 (effectively the US population) with the attendant building programme, energy use, waste, consumerism etc. And that is just China. Factor in India and you get a feel for the extent of global urbanization and the need for a quantum shift of policy and behaviors towards more sustainable habitation of our planet.
In this context, Thames Gateway is the biggest economic regeneration zone in Europe, with all-party support to create a global exemplar of an "eco-region". The SEF produced a green paper, which reviews progress towards this bjective. The chapter that created most debate was that on governance, specifically the need for a unifying body if the Government's aspirations for an Eco-Region are to be fulfilled.
This need was aptly illustrated when I attended a Thames Gateway Parliamentary Reception. Lord Falconer spoke eloquently of a unity of purpose towards the Thames Gateway. At least he did until, smugly, he produced from his top pocket, HIS 10 point plan for HIS interest group (Thames Gateway London Partnership). I later put it to him, that given there are over 60 public sector bodies involved in the Thames Gateway, similar 10 point plans would mean, in reality, a 600+ point plan. His aide intervened with immaculate timing. Such is the unity of vision.
Enter Sir Terry Farrell. Sir Terry’s “Core Vision” for the Thames Gateway advocates a unity of vision and purpose not necessarily in terms of a Unitary legal structure, but rather along the lines of the model used at Emscher Park, Dusseldorf. In short, a true meeting of minds. I will be organizing an event to enable sir Terry to explain his Vision, inviting key public and private sector stakeholders so that private sector ambitions and concerns can be debated with our public sector custodians.
One final thought. The government's reality defying debt mountain may well result in a streamlining of government Agencies overseeing Thames Gateway. Whatever the reason for rationalization (if it happens), to the minds of many, it can't come soon enough.
And now, dear readers you can return to Copenhagen ….
Barrie blogs on `childish’ Asda
I loathe censorship and I hate bullies.
So the news that Savills has been sidelined by Asda after one of its executives voiced legitimate views on proposed new planning rules puts the store at the bottom of my Christmas card list.
To recap, Savills’ director of retail planning Jeremy Hinds told Property Week TV at the BCSC conference in November that he had concerns over proposed new Competition Commission rules.
Hinds, like nearly all his peers at the top of the planning world, is concerned that a competition test for supermarket operators is unnecessary in an already cut-throat field.
Asda, a client of Savills, and a backer of the new rules, then threw its toys out of the pram.
Just because it disagreed with what a highly-regarded expert from Britain’s biggest agent said in a public forum, it disinstructed Savills from a range of work.
In 21 years of writing about the built environment I have never heard of such a petty, ill-informed, misguided stunt.
Surely the very reason firms like Savills are prized for their opinions is because they are independent, rather than lapdogs whose views are worth nothing at all?
Which takes me back to September 1989 when as a reporter at Property Week’s forerunner Estates Times I covered a research report considered a sensation at the time.
`Savills sparks share slump’ screamed ET’s front page, after the firm’s City guru Charles Sanderson spoke the unspoken – revealing that a huge City development boom would end in tears.
Land Securities, British Land and others saw their shares sink, but what I will always remember is that while lily-livered rivals claimed the boom would never end, Savills spoke the truth.
Now, Jeremy Hind and the firm are being crucified by a bullying client for doing the same again: read dozens of reports on the Competition Commission’s test and it has been panned.
So, Asda – grow up, reinstruct Savills, and apologise to Hinds by giving him a magnum of your best champagne.
And Property Week readers, steer clear of the store until it has righted a wrong that goes to the heart of agents giving independent advice.
Landlords: work in partnership with tenants on energy efficiency, get better leases
The introduction of the Carbon Reduction Commitment looks set to provide yet another catalyst for landlords and tenants to disagree.
Lawyers are rubbing their hands together in glee at the prospect of the complicated contracts required to distinguish how government-recycled revenues will be recycled back multiple tenants, all performing differently in terms of benchmarked emissions.
But James Cameron from Climate Change Capital has a better option. In a UK Trade and Industry side event at the Copenhagen climate summit he stated that landlords who have cooperated with tenants in reviewing energy efficiency measures have seen resultant improvements to commercial leases. This apparently bizarre phenomenon arises due to the greater trust that forms between the two parties upon cooperation, and the additional value tenants then see in building a relationship.
Rather than opening the doors (and the wallets) to the lawyers, take note. Landlords who get into the Christmas spirit and team up with tenants to work on energy efficiency are likely to see better rewards than increased cheer.
“Real-Time” Search and the property market
Harold Wilson was once attributed with saying: “A week is a long time in politics”. Over the past week this could also be said of the world of search engines - as first Google and then, just days later, Yahoo announced that they were both launching “real-time” search features.
These launches by Google and Yahoo follow a similar service that has been offered by Microsoft on its “Bing” search engine since October.
These real-time search results are now beginning to appear within those we are used to seeing produced by the search engines and allow users to see what is being said about any particular topic, at the very moment of the enquiry, on blogs and other social media sites such as Twitter, FriendFeed and MySpace.
An example of real-time search is shown below where comments (not all of them flattering) have been appearing from Twitter, YouTube and other blogs about Silvio Berlusconi being assaulted in Milan yesterday (13 December). (It is interesting to note that the Twitter and YouTube results are found after the BBC’s coverage but before all other news websites).
It is generally expected that real-time search will mean that organisations which regularly update their websites and blogs with news items, research, market commentary - and those that generate content via social media - will have an online advantage over their competitors who do not. It certainly seems that the most recently updated content will become the most prominent (and therefore the most visited) in search results.
One commentator went so far as saying that Monday 7th December 2009 will “long be known as the day that Google forced B2B companies to tweet.” Whilst I’m not sure that I agree with that statement, such is the expected impact of real-time search that it does suggest that the provision of new content on websites and corporate blogs will become even more of a priority to those businesses that are interested in maintaining their online profile.
“So what?” I hear some of you saying. “What relevance is this to the property industry?”
Well – there is an obvious advantage in the residential sector where the competition to attract members of the public to marketing and database websites is fierce. The use of Social Media Marketing (SMM) has been grasped with enthusiasm by some of the more forward thinking residential firms and agencies where the potential of having an ongoing dialogue with potential buyers and vendors is obvious. These firms will now begin to have an advantage over their competitors with regard to search engine performance too.
An agency in The Netherlands has recently taken the next step along this path, by making its database of properties available for integration into Google Wave – a real-time online collaboration tool that is touted as the search giant’s next “big thing” (it is yet to be made widely available as it is still being tested by global community of geeky guinea pigs).
Real-time search could, however, be a double-edged sword for corporate reputations.
Take, for example, the “estate agent fired for watching hundreds of hours of porn” story that was all over the tabloids and Twitter earlier in the month. Had real-time search been live a week previously – it might well have been a story brought to the attention (and read) by anyone innocently looking online for a local “estate agent” to entrust the sale of their house with! Maybe Mr Stewart was lucky that this news story was, at the time, more difficult to stumble upon. This is less likely to be the case in the future.
Should we take it seriously? After all - “Social Media is only really popular amongst teenagers and the IT department isn’t it?”
This statement might have been true a couple of years ago but another relevant event occurred in the past week – and it concerns Property Week’s own social network - which passed the 500 members milestone. Proof, if proof was needed, that property is a very 'social' industry. This milestone (and the numbers are increasing daily) also indicates that "Social Media" is now a serious form of business communication within property. (You can even play spot the celebrity” on the Property Network if you want to!)
Further evidence of the potential for Social Media (and real-time search) to drive the news agenda within the property industry can be illustrated by looking at events of just a few weeks ago.
On November 24th the news broke that Nakheel, the Dubai state-owned developer, and its parent had made a request to suspend debt repayments. The news sent reverberations around the globe and the markets took a heavy blow to confidence. Property development and property investment were, once again, headline news and as you would expect, the number of online searches recorded for the term “Dubai” spiked dramatically – as illustrated by the graph below, supplied by Google.
At the same time, the number of references to “Dubai” made on micro-blogging site Twitter also spiked – as shown below in the Twibuz graph for “Tweets per minute”.
Had real-time search been active on Google at this time – it is quite probable that some of the news that we read regarding Dubai and its property market could have been straight from the public debate that went on in the blogosphere.
Real-time search is now a reality and it will increasingly become relied upon by those looking for the latest business information; including property and the property industry. We can either embrace it, adapting our marketing and online publicity strategies or hope that things will stay the same.
While you think about the implications for your business – I’m just going to check on Twitter to get my real-time news fix.
Festive greetings.
Andrew
I’ll huff and I’ll puff and I’ll blow your house down
At the UN summit in Copenhagen, the weekend doesn’t mean rest from the cyclone of climate change activities hitting the amassed delegates and local population. Sunday was no different, and in search of a change from the sterility of the official conference venue, the Bella Centre, I visited the Climate Bottom lectures in Christiania.
Christiania is famous in Copenhagen for being the hippy village – a hangover from a 70s protest against the lack of affordable housing in Copenhagen. Today it is an independent township based on values of sustainability and community (and formerly drug-pushing, but after a police crackdown in 2004 people have now found more constructive ways to spend their time). Passing the entrance gate made from fallen trees, and signs made from reclaimed materials, there seems no place in Copenhagen better suited to host a talk about natural buildings.
It’s worth briefly explaining the name ‘Climate Bottom’. I originally thought it might signal potential nudity - you never know with these free-living types - but in these sub-zero temperatures there was luckily a simpler (and warmer) explanation. The word for summit in Danish literally means ‘top meeting’, so this was the opposite: the people’s movement for sustainability, or the ‘bottom meeting’.
As he talked, Ianto Evans, Founder of the Cob Cottage Company and teacher at the School of Natural Building in Oregon, USA, trampled dangerously around the tiny candles that were scattered on the floor of the tent to illuminate his lecture.
The enthusiasm of the bearded, woolly-jumper clad pioneer of natural building was infectious. He believes natural buildings could be the sustainable future domestic construction is looking for. Ingredients he has used in building his own house include bent trees, rejected by loggers because they are difficult to fit onto lorries; waste manufactured materials, such as car tyres; and mud and straw, which are the main components of the walls, floors, tables and, well, pretty much everything.
Am I convinced this provides all we need for a sustainable domestic infrastructure? Not quite.
There are certainly some brilliant ideas. Rather than order glass to fit the window, windows are fashioned around pieces of broken glass, turning the normal process of construction on its head and achieving a dramatic Gaudi-esque appearance for what is, to all intents and purposes, a mud hut.
But part of the culture of the natural building movement seems to be the hands-on involvement. The anyone-can-do-it, grab-some-mud-and-have-a-go gusto that Ianto has in abundance. I just can’t see this catching on in the mainstream, and although Ianto reports he has 60 apprentices learning the skill at his school ready to ply their trade commercially, I’m not convinced the market for natural buildings is going to be huge.
Not least because of our changing climate. Although Ianto assures us that the buildings won’t wash away in the rain – a roof and plaster-covered walls make sure of that – will the buildings be able to withstand the extreme weather events the Met Office tells us we are likely to experience in the coming decades? The jury is out. If they can’t I’m not sure even those most committed to this movement will have the energy to keep rebuilding their houses of straw.
Winter awards rush is good for us
Winter is upon us and it seems to bring a never ending series of awards dinners.
For all industries they give a measure of who is at the peak of their game and for the entertainment industry it provides a relatively cheap source for extra entertainment programmes!
Well, having just picked up the Best London Property Management Company of the Year Award at the inaugural Property Management Awards, hosted by the independent publication for the flat sector, News On The Block; the feelings pretty good!
Chainbow also managed to get two finalists in the Porter of the Year Award. Only fair to give a name check for Red Houjabi, who is based at The Water Garden in Canada Water and also for Anthony Coker who works at Oppidan Apartment in West Hampstead.
Congratulations Red and Anthony!
Winning an award is always a great achievement and for Chainbow it shows the industry we do practice what we preach – fantastic service, two-way communication and open, honest reporting.
I like to think we set a high standard in an industry that is known for poor service. Winning this award is a nod in the right direction for us.
It is great that there is finally an award ceremony for the property management industry to aspire to. Let us just hope it leads to the industry standards rising.
Roger Southam and Sir Trevor McDonald - together at last!
Managing agent and consumer advocate, Roger Southam, hits the small screen tonight on ITV with Trevor McDonald.
‘Every little helps’… ‘Why Pay More?’ … ‘Good food for less’… the major retailers are convincing us that they have quality products for a reasonable price through sassy slogans and marketing jargon. One thing the current recession has taught us is that we can usually get the same quality products from a pound store as we do at a High Street retailer.
Tonight, on ITV Tonight, I will put my theory to the test tonight from 8:00pm with one of Sir Alan Sugar’s former apprentices, Raef Bjayou.
The Rise of the Pound store has boomed since the recession kicked in last year as families look more closely at their weekly grocery bills, children’s ballet classes and the affordability of that annual overseas holiday.
When you scrutinise every purchase over such a long period, an obvious question comes to mind, ‘Why did I pay so much before when I’m paying less for the same thing now?’ Have we, as consumers, thrown away money without thinking about it? Put simply, the answer is yes.
Raef and I trawled through countless products from children’s toys to food items and nine times out of ten, the same product could be found for less at Poundland compared to a High Street store.
With Christmas just a few weeks away this is an important issue for shoppers. Will Gran really know the difference between M&S biscuits and those from the 99p Stores? Will your daughter know the difference between a doll from John Lewis and a doll from Woolworths online? The truth be told, she is likely to care more about the wrapping paper.
For years we have overspent unnecessary and now the belt is tightened, we should learn to try and stay trim. Our New Year’s resolution should be to remember the lessons we have learnt during this recession.
If you’re not convinced, then the proof is in the pudding – you pay you’re money and take your choice!
Man in the Mirror
My desk is nearly clear, I’m nearly done and the sustainable office Christmas tree has been on all night again. Soon I’ll be gone. But don’t get too excited, I don’t have a terminal disease and no one’s uncovered my insider dealing or illegal human trafficking either.
I’m just about to take a well deserved month away from property. But I can’t help having a quick reflection first and look ahead to next year while I pick another few receipts from under my keyboard and find long-lost shoe polish under some newspapers.
The year’s certainly flown by. And despite the Winter of Discontent that this hopeless government seems keen to plague us with, there’s real positivity in the air.
You know things are on the up when Francis Salway, that most carefully considered of property legends, has a smile on his face and a spring in his step. It may have been all the cinnamon candles at Land Securities’ Christmas shindig, but his points about how the industry should be proud of crossing the landlord-tenant divide and doing some reputation reparation was fully justified.
Through 2009, retail was the new housing. From the minute Phil Green kicked off the mumfly rents in summer 2008 all in the name of ‘small business’ (the irony of him berating journalists from the confines of his Monaco-based yacht being wholly lost on many), the industry needed to pull its finger out. It took a while, but it did, thankfully.
And what’s been most interesting hasn’t been the various saga-like meetings around service charges, rents, insurance premiums and the like (leave that to the lawyers), but more the very clear step-change in the property industry’s approach to things. Where once upon a time many of the big firms wouldn’t say a word for fear of getting pilloried in the press, many of our most favoured company leaders have been all too happy to speak up.
Some of the chip-shouldered minority may have missed that, but what’s been clear is that the raft of initiatives introduced over the last year have gone a long way to changing the historic view of property. You know: the one where it screws over everyone and then steals the Christmas tree.
And as we head into an election and look towards a new administration, it’s vital the industry continues to be seen as responsible. Not just for the sake of saving face but for the sake of insuring it doesn’t get shafted with legislation it doesn’t like designed to protect occupiers needlessly. While insolvencies will no doubt snow ball as the fallout from Christmas sales begins to digest, as we’ve seen, there’s little the industry will be able to do. Recessions weed out poor performers. If the recession were a TV programme, it would be X-Factor: a colossal boil of an experience that people try hopelessly to avoid but somehow end up getting caught up in regardless.
But responsibility extends to more than just monthly rents or service charge transparency. Indeed, these are things that should be there as standard practice. While the Copenhagen conference is all about whether Obama can be made to do anything, the property industry will have to prove itself domestically if it’s to escape the likely ravage of green taxes that will come in at some point.
My favourite Obama quip of the week compares him to Bush. George W may have talked rubbish for the most part, but at least people listened to him. Obama speaks sense but no one blinks an eyelid (Korea, Iran, etc).
CBRE’s Charlotte Eddington – who won the Women in the City property award – was on Radio 4’s Today Programme this morning speaking sense. “The government’s been ignoring existing buildings and wrongly focusing on the 2 per cent of new buildings,” she said. Too right. Only in the UK could you have 92 different bodies and departments dealing with environmental issues and not one dealing with the source of half of the UK’s emissions. Maybe the Tories will start giving out free wind turbines with the Mail on Sunday when they get in?
If they don’t, then the industry is going to have to get its innovation cap on, because this political ignorance won’t last forever. And 2010 is likely to be the first year it comes under the spotlight as the carbon reduction commitment – the cab and trade scheme for big energy users – comes in.
Next year is also likely to see the community infrastructure levy (CIL) stagger in, although to what extent it will get implemented remains to be seen. Suddenly the ‘woefully inadequate’ section 106 system doesn’t look so bad, does it lads? (It’s amazing how, when it suits, the property industry can be more fickle than a harem of teenage goth girls.)
One tiny glimmer of hope– found when trawling through the Chancellor’s press statements – was the talk of councils being able to possibly borrow against future CIL raising. This could prove an interesting complement to other methods, such as tax increment financing. Concerns over the borrowing implications these bring with them will need to be allayed, however, especially with the Tories.
The New Year does beckon some positivity though, even if it must be guarded in an acceptance that rents will continue to take a battering in secondary areas and that banks are going to have start selling stuff to reclaim debts. For starters, Gordon Brown will be gone this time next year. For seconds, Ed Balls and Mandelson will doubtlessly be gone too. That’s three reasons.
The fourth and biggest will be that all the good things worked up during 2009 will bear fruit. The industry’s responsibility and flexibility will stand it in a better light with its customers and wider stakeholders. The ice will begin to thaw a little more on those historic reputational barriers we’re fighting against. And who knows: there may even be some property agents at MIPIM, unless the organisers sue everyone for running parties outside the controlled area, that is.
At least all those who wanted Santa to leave them a positive IPD figure in their socks will be content. Of course, I’m far too old to believe in Christmas.
Happy New Year.
Red Ken vs blue blood
Just back from chairing the Movers & Shakers breakfast at the Dorchester, where panellists Ken Livingstone, Adrian Wyatt, Sir Bob Kerslake and Liz Peace did the 300-strong audience proud.
Ken was on the best form of all – slating the Prince of Wales for intervening in Chelsea Barracks.
He based this on
(a) the Prince’s ghastly taste in design, as evidenced by the bleak, faux Olde Worlde Poundbury and
(b) the fact that he has prevented the early creation of hundreds of construction jobs.
The former mayor held back, however, from criticising Alastair Darling’s soak the rich Pre-Budget Report.
He did, however, concede that he would have tried to prevent any measures that damage London as a financial centre.
With the next London mayoral election two and a half year speculation is growing on who will be the Labour candidate.
Livingstone himself is desperate to make a comeback, but may well face competition from Home Office minister and London MP David Lammie and former Bethnal Green MP Oona King.
One other name is emerging, too.
There is a school of thought that Peter Mandelson might fancy his chances of breaking back in from the political wilderness if Labour loses the election by 2012.
Has he got the charisma? Possibly. An affinity with London? Being truly metropolitan, yes.
But charm and warmth and an eye for minutae like business rates? Definitely not.
Bring back Ken! [see Livingstone speaking at Movers & Shakers at Propertyweek.com on Monday]
Tighter regulation required for energy efficiency – or just more common sense
CEOs and Heads of Sustainability convened yesterday at the Copenhagen Communique event to talk about the part business has to play in setting society on a path low carbon path. To briefly explain – the Copenhagen Communique is a statement, signed by over 900 business leaders, calling for a strong and effective deal to be agreed at Copenhagen.
The event was a collection of senior management from signatory organisations – ranging from Skanska to Shell to Sainsburys – discussing their views on the priorities and policies they want to see highlighted in the negotiations.
Noel Morrin, Senior Vice President for Sustainability at Skanska, opened discussions, highlighting the huge opportunities for emissions reduction available in the built environment.
As an example, he cited the energy efficiency measures Skanska deployed in their office on the 32nd floor of the Empire State building, which not only reduced energy use by 30% but motivated the building owners to retrofit the whole building.
Regarding the part government should play, Noel called for tighter regulation to force greater implementation of energy efficiency measures. This was seconded by Clay Nesler, Vice President of Global Energy and Sustainability from Johnson Controls, who said more could be achieved through stricter building codes and energy efficiency resource standards.
These are very good points. Although the enlightened can see the benefit, the many are not looking and will need to be forced to. The strong business case has been proven by the likes of Skanska and Johnson Controls, but investment in energy efficiency remains much lower than what is possible – and below what is required to tackle the scale of the problem.
Yet my feeling is that the imperative to act ought to be heightened, rather than reduced, by the potential for greater regulation. If businesses don't start acting now, the Government is likely to start looking to use the stick a bit more. Then businesses may wish they had been more careful what they asked for.
Europe showcases green cities
After a stumbling and content-less speech, delivered in monotone by Elisabet Falemo, State Secretary to the Swedish Minister for the Environment, I was ready to be underwhelmed by the European green cities showcase. In fact I was ready for a snooze.
But I hung in there and it was worth it.
The case for green cities is a no-brainer. Cities and towns cover only 2% of the earth’s surface but account for 80% of emissions. By 2030, two thirds of the world’s population will live in urban areas.
Moreover, even if we secure a climate deal here in Copenhagen, cities will need to adapt to the likely 2 degree C increase in average global temperatures. The ‘urban heat island’ affect, in which urban areas absorb and retain heat to a greater degree than rural areas, will mean even greater temperature rises in cities. Additional challenges will arise from the increased likelihood of extreme weather events leading to effects such as flooding and water scarcity.
There seem to be two main reasons for success in planning and delivering a green city.
The first is strong local leadership. Many cities that have succeeded in improving quality of life and local economies through green development, such as Stockholm and Malmo, are in the Covenant of Mayors, an EU-led coalition of mayors that have committed their cities to at least a 20% reduction in emissions on 1990 levels by 2020. Local leadership is also close to practical implementation issues and incentivised to work with developer to find green solutions.
The second is citizen involvement. Hamburg, which uses participatory planning, has already achieved a 15% reduction in emissions from 1990 levels. Their target is an ambitious 40% reduction by 2020. In Stockholm, planners, developers and citizens worked together to clarify the goals of the Hammarby Sjostad and Stockholm Royal Seaport redevelopments, focussing for the residential properties on making it easy for individuals to be green. This resulted, for the Royal Seaport, in a target for the area to be free of fossil fuels by 2030 and the incorporation of an innovation centre where academics and businesses partner to develop solutions for mitigation of and adaptation to climate change.
Giles Barrie’s Pre-Budget Report blog shows little to turn property on
For property the reaction to the Pre-Budget report will be pretty lukewarm.
Congratulations first to the business centres lobby for winning an extension to empty rates relief for another year for premises with a rateable value below £18,000.
Housebuilders, too, have won a desperately needed promise to reduce the `impact of regulation on the house building sector’.
On the Private Rented sector, it is, however, a promise of jam tomorrow.
It’s better than nothing, but the promise of a new consultation document early in 2010 hardly sets the pulse racing.
A vow to look at `any barriers’ to investment in private rented homes, examining how stamp duty and REIT regulation impede the regime, is good news, though.
On Tax Increment Financing there is also a promise to `continue to examine the framework needed’ and to look at what new laws would be needed to introduce TIFs.
I wonder if we will ever see TIFs given that they effectively mean more borrowing by the state.
And the biggest disappointment of all? The cuts in quangoes and state property sell-offs promised will barely touch the UK budget deficit’s sides.
Finally, we are promised a new quango, Infrastructure UK.
It will `bring together TIFU, HM Treasury’s Public-Private Partnership policy team and the capabilities within Partnerships UK’…also working with the OGC, BIS, DFT and DECC.
So much for rolling back the state…
Search engines – Property - Something Digital – Blah, Blah, Blah
Everyone knows about Google.
Most of us use it on a daily basis and each time we do the phrases and words that we use are recorded and collated by the world’s favourite search engine. This information is then made available to businesses and individuals choosing to advertise on Google – those bite-sized adverts that you find embedded on random web pages everywhere and that appear adjacent to the results produced whenever you press the search button.
This information is published to help the advertiser to identify the keywords and phrases that are the most popular at a particular point in time; assisting them to choose which words should be used (or avoided) to ensure that any online advertising spend is both cost efficient and successful.
Whilst this information is primarily aimed at those wishing to advertise on Google, it is also of value to those interested in the performance of their own websites. Such information can indicate the words and phrases that should be used within the content of a website to make it relevant to the human visitors that come to use the site. Even more importantly - the use and placement of relevant keywords and phrases will have an impact (either positive or negative) upon a website’s position in search engine results.
Conveniently Google not only tells you the search terms that are popular now but also the frequency with which these words have been used over a period of time. This in turn allows the tracking of the relative volumes of particular search terms for selected markets and market segments; including those relevant to commercial real estate.
Taking this data Revolution Public Relations conceived The Property Search Index to provide an insight into the Google search patterns for phases and key words relating to commercial property in the UK.
The study looks at thirty of the most commonly used search terms and monitors the volume of their usage in the UK each month - giving an idea of the levels of interest in the sector and a useful indication of market sentiment.
The figures for November 09 confirm an upward trend in Google based searches relating to the commercial property sector – matching the anecdotal and other evidence of an improving market.
The retail sector has been the star performer - with a fairly dramatic increase in monthly activity over the month. The trend for retail has been upward for many months; since a low point earlier in the year. Maybe there is a correlation between redundancies and people wishing to set up a shop and to work for themselves?
The office and industrial sectors also experienced an increase in activity during November, although they both remain below the average levels of online activity for the preceding twelve month period. Interest levels in the investment sector stayed almost the same as October (there was a slight fall) but remain above the twelve month average.
The research also reveals some interesting insights into the phrases and words used by those searching for property – some of which might prove useful next time you update the content of your website.
For example (retail agents please take note) hardly anyone ever searches for “retail property” – the majority simply look for “shops”. So if your website describes you as “a retail property expert” you might want to think again if you hope to attract retailers.
Sorry – a slip of the fingers there - I meant “shop keepers”.
Here’s another: if you’ve been getting a lot of visits to your website from lorry drivers, hauliers and logistics companies - it might just be that it’s because “commercial lease” is a popular search term for those looking to acquire a new HGV on finance.
And there you were thinking it was because they wanted new warehouse accommodation.
I’ll stop now because I could go on for hours on this topic and bore you all....something digital....blah, blah, blah.....
Further information and a copy of “The Property Search Index Report” for November can be found at: www.revolution-pr.co.uk/psi.
Patrick Fox on how things are shaping up for Bray Fox Smith
Well things are hotting up at BrayFoxSmith...
IT, without tempting fate, seems to be running more smoothly now so we have been able to concentrate on real money generating work.
Our head of IT, Rob, has had a better couple of months in respect of problem solving and general IT ‘issues’ so stress levels have now returned to normal...
The bank account is growing which bodes well for being able to afford a Christmas party for 3... rather than a table for 3 at the local Wimpy!
The sexier investment and development deals are still hard work with sellers and buyers as unpredictable as the pricing.
Rob has several bids out at present but the champagne is still firmly on ice.
Luckily lease re-gears are proving a good source of revenue.
We are currently handling three re-gears, one of which has completed and the other two are in solicitors hands. Whilst it's a tricky thing knowing how to balance tenant's rent and incentives against capital uplift in this market, the lack of tenant demand in the present market makes undertaking re-gears with existing occupiers an obvious way of limiting voids for our Landlords.
Our JVC instruction at Harp View Business Park, Staples Corner has grown somewhat by the inclusion of their main distribution warehouse which adds an additional 119,280 sq ft for us to offer.
The warehouse was built about 4 years ago and can be combined with the existing top spec office accommodation of 42,570 sq ft, which was built at the same time, to create a superb head-quarters complex located next to the attractive Welch Harp lake. All enquiries gratefully received...
Life is never predictable these days... We sponsored a Development Agents lunch at Balls Brothers in November, which is an excellent event held every 6 to 8 weeks and is a great way to catch up with colleagues in the business and swap ideas etc. All best plans and all that... I had been trying to arrange a meeting in Leeds with one of my clients and it transpired that the only day he could make it was... yes you’ve guessed it; the same day as the lunch! Thanks to Rob for going on his own and holding court with about 30 agents and he came back with a great lead that he is progressing now so well worth it!
On a similar note, having raced Moto-Cross for many years as a younger man, I was coerced into racing at this year’s crazy Weston Super Mare Beach Race and so we decided to brand my bike as a ‘BrayFoxSmith Yamaha YZF 250’... There are over 1,000 bikes on the start line, racing at ludicrous speeds down a 1.5 mile start straight to be followed by another 2 miles of man-made sand dunes with 40 foot faces!
The weather is unpredictable at best with the race held in October, and this year was bad... really bad! Rain coming down diagonally driven by savage winds off the sea.
The weather was so bad and the tide narrowing the start straight so much that there was an almighty crash half way down the start straight involving 17 bikes and riders; all 17 of which ended up in the local hospital, and 7 of those were seriously hurt.
Amid rumours in the pits of a fatality, we eventually got to the start line again....only to be told that the hospital could not take the risk of more injuries as they had run out of beds! The good old HSE finally called off the race. Gutted – another BrayFoxSmith sponsored outing I had to miss out on!
Oh well... there’s always next year!
Climate talks start today in Copenhagen
The 15th UN Conference of Parties, COP15, kicks off today in Copenhagen. The aim of the conference is to deliver an agreement limiting global warming to less than 2 degrees C – the temperature that would give us a realistic chance of avoiding “catastrophic” climate change. The talks will also focus on how the rapid U-turn from oil-dependence to low carbon society can be achieved, how much it will cost and where the billions of dollars needed will come from.
I’m a Director of Carbon Retirement - www.carbonretirement.com - an offsetting firm with a difference. Rather than invest in projects that are supposed to reduce emissions overseas, we force reductions in Europe by buying industrial pollution permits and permanently removing them from the system. So rather than buying permits and continuing to pollute, industrial companies have to reduce their emissions.
I’m attending the climate talks in Copenhagen to add my voice to the many objecting to the use of offsetting in developing countries as a solution to climate change. Whilst it is important to support developing countries to follow a cleaner development path, this shouldn’t be at the exclusion of tackling emissions in our own backyards.
I also plan to join the hundreds of UK corporations calling for our government to lead on this issue and send a clear message to businesses about what is expected from the sector.
Travelling into Copenhagen on the Climate Express train on Saturday, my fellow passengers – climate scientists, environmental activists and politicians – had mixed feelings about the likely outcome of the talks.
Whilst there are glimmers of hope, the current positions being tabled aren’t ambitious enough to keep us under the critical 2 degree temperature rise. This is frustrating, to say the least, when we already have the ideas and technology that would get us a huge part of the way to the necessary emissions cuts.
So what are the main areas up for negotiation, and what is up for grabs for the UK?
The key area, obviously, is emissions cuts. The UK is already committed to a 34% cut in 1990 emissions levels by 2020, which is over and above the maximum 30% cut proposed by the EU. But businesses won’t have clarity until the UK reveals how much of this target will be met through offsetting. The current proposals stand at around a third, but most developing countries are unlikely to accept such a low level of cuts within the countries that are historically responsible for the climate problem.
Linked to this is the question of who will fund the reductions. In the UK the bulk of the finance is likely to be sourced from the private sector, through emissions trading, tighter legislation on energy efficiency and renewables , and policies like the Carbon Reduction Commitment. These measures are likely to increase the cost of newly-constructed buildings and focus attention on the energy performance of existing buildings.
Supporting developing countries to adapt to the effects of climate change is the other major issue. Yet with the lack of ambition currently on the table, it might not just be those in the most exposed areas of the world who need to focus on making infrastructure resilient to a changing climate.
If the Tories don't get in I'm leaving the country
Anyone who has read the Ellandi blog will know that I am pretty left of centre for a property chap, heck I'll even admit to the fact that I was actually a card carrying member of the Labour Party until well into my 30's.
Which is why I really must explain why I am voting Tory next May.
Ah, the 50% tax rate I hear you say? Nope. To be fair earning £150k next year is something to aspire to.
It's more the case of being terrified what a hung parliament would do to the UK in these difficult times and according to The Independent (see more proof of my pinko-lefty credentials), this is almost a dead cert.
Tuen Draaisma of Morgan Stanley has a fear for next year that "The UK becomes the first of the G10 to have a major fiscal crisis as elections lead to a hung parliament".
Why would a hung parliament be such a bad thing? I've often thought that Proportional Representation would lead to a nice ineffectual government stripped of dogma; after all decades of coalitions don't seem to have held Germany back? The difference, of course, being that the Germans are not fiscally incontinent, have credibility in respect of keeping on top of inflation and don't rely on the rest of the world to fund its deficits.
Despite still being in recession, the rest of the world hasn't punished the UK too badly.
They have even let us get away with a fairly blatant spot of competitive devaluation, which has certainly beggared the shopkeepers of the RoI that neighbour the border with North.
However "the markets" tolerance of this is built on the premise that after the election, one of the main parties will cut the crap and get on with a seriously painful bit of tax raising and service cutting to get somewhere near a sustainable level of borrowing.
In the event of a hung parliament, or worryingly even the anticipation of a hung parliament, where every painful decision will be fought over tooth and nail or even avoided, UK plc will lose any credibility that it has overseas. What happens then? - the pound tanks (even further) - we loose our AAA rating, bond rates shoot up; we can no longer sustain our massive debt - inflation rockets due to the increased cost of raw material imports - interest rates are ratcheted up to curb inflation -Plague, pestilence, famine........
You get the picture? Basically Iceland without the free hot showers and Bjork. So I am going to vote Conservative for the first time this June. Having said that though, I am not sure how effectual this will be given that I live in Lambeth. Maybe PR is not such a bad thing?
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